MercoPress. South Atlantic News Agency

Brazilian Finance ministry top official resigns after ten years in office

The true reasons for Barbosa’s departure are not clear

Brazil's Deputy Finance Minister Nelson Barbosa, who helped design some of the government's flagship economic projects, has handed in his resignation for personal reasons and will leave the post in June, the ministry announced on Monday.

Folha de S. Paulo newspaper reported his departure over the weekend, citing loss of influence within President Dilma Rousseff's government as the reason for his resignation.

Folha said Barbosa, once a close advisor to Rousseff, had lost access to the president with the rise of Treasury Secretary Arno Agustin, who is expected to take his place as the ministry's executive secretary.

Barbosa has been in the government since the Workers' Party took office in 2003 under former president Lula da Silva. He helped conceive the accelerated growth program for increased investment in infrastructure and, more recently, the low-cost housing program called Minha Casa Minha Vida.

The paper said Barbosa agreed to remain in the post until a key project he was involved in, reforming the ICMS state-based tax on the circulation of goods and services, clears Congress.

Barbosa is seen as a moderate in Rousseff's economic team and his departure will be a loss for advocates of a more aggressive reform agenda and a gain for those to favouring policies based on more intervention by the state in the economy.

Observers of the once-booming Brazilian economy saw his exit as a negative development for economic policy management as Brazil struggles to encourage more private investment and recover solid growth.

“Barbosa defended lower fiscal targets in order to boost growth and investments, but he stood against Agustin's decision to engage in creative accounting tricks to artificially boost last year's primary surplus result,” Washington-based Eurasia, an investment consultancy, said in a note to clients.

Eurasia said Barbosa's decision to resign probably has more to do with power politics within Rousseff's economic team led by Finance Minister Guido Mantega than her decision to opt for less orthodox policies.